The revelation that the former Barclays investment bankers have been paid roughly $1.75m each for just a year-and-a-half's work came as the lender disclosed it will be bringing the assets back on balance sheet, ending an episode that is estimated to have cost shareholders $130m.

Barclays disclosed on Wednesday that it will be "acquiring control" of Protium, a company founded in September 2009 with a $12.6bn Barclays loan to take $12.3bn of toxic waste off its books. As part of the deal, about 45 Barclays bankers transferred to a US company, C12 Capital, to manage the assets – receiving an annual $40m fee and a share of any profits. Their number has since swelled to about 80.

Protium has proved controversial, sparking concerns among regulators and shareholders. As originally struck, the deal handed third-party investors and the C12 bankers all the potential upside while leaving Barclays exposed to all the risk.

To extricate itself from the agreement, Barclays has repaid Protium's investors their $450m, as well as about $50m in interest, and awarded the C12 bankers $83m "in accordance with the performance fees that would have been due under the original agreement, based on investment performance to date".

The "performance fees" come on top of the $60m in management fees already earned. Lord Oakeshott, the former Liberal Democrat Treasury spokesman, asked: "What was going on inside Barclays Capital to be held to ransom by its bankers in this way?"

C12 has agreed to cut its fees to about $30m a year and has given up any further upside. The assets will now be wound down or sold by June 2014 instead of September 2019, reducing the total management cost by over $200m.

Crucially for shareholders, Barclays said that "from this time, Barclays is exposed to the majority of risks and rewards of Protium". Under the original deal, it bore all the risk but no rewards.

As a result, the cost of the episode to shareholders has been capped at about $130m – the sum paid out over and above pure management fees. The cost under the original deal is likely to have topped $500m, with $315m earmarked for interest payments to the Protium investors alone.

In February, Barclays took a £532m hit to profits as it was forced to carry the loan at the market value of the underlying assets – undermining the key principle of the deal. The provision has since been revised down to £342m.

The hit to profits followed Barclays' decision to end the deal early after new rules trebled the capital requirements. Barclays has been repaid $3.3bn of the loan, and $600m in interest, to date.

As part of the exit deal with C12, Barclays agreed to invest $750m for no more than three years in Helix, a new fund set up by the C12 bankers. Barclays will hold the "majority interest". Insiders said it is possible that Helix may buy some of the Protium assets.